A gold rush of new investment into renewable power over the past 18 months has led the United Nations to conclude that clean energy could provide almost a quarter of the world's electricity by 2030.More than £35bn was injected into wind and solar power and biofuels in 2006, 43% more than the preceding year. Sustainable energy accounts for only 2% of the world's total but the UN says 18% of all power plants under construction are in this sector.
The findings, outlined in the Global Trends in Sustainable Development annual review, represent a challenge to the received wisdom among energy experts that green power is likely to play only a marginal part in the energy mix until at least the second half of the century.
The International Energy Agency in Paris, which recently argued that renewables could account for barely 9% of power production by 2030, said the figures needed further examination. Greenpeace described them as "great news - if true".
Achim Steiner, executive director of the UN environment programme, said in a foreword to the review that bankers and other fund managers have ignored government dithering over climate change and started to shift the whole balance of the sector by pumping money into technologies that tackle global warming.
"The increasing investments in clean energy also point to deeper change - a tipping point where sustainable energy technology is the fundamental component of the global energy system," he explains. "Indeed, as Global Trends in Sustainable Energy Investment suggests, that point may already be here."
Including money spent on company mergers and acquisitions, the total amount of cash injected into renewables last year was $100bn (£50bn), with $70.9bn on new projects. On the basis of the investment levels so far, new investment will rise to $85bn this year. Venture capital and private equity have joined in the scramble, raising their contributions by almost 70% to $8.6bn in 2006.
Nearly three quarters of the new investment is going into companies and projects located in the US and European Union but 21% was aimed at the developing world, with China and India leading the field.
SCROLL TO CONTINUE WITH CONTENT
Never Miss a Beat.
Get our best delivered to your inbox.
"This is full-scale industrial development, not just a tweaking of the energy system, where growth is underpinned by a widening array of clean energy and climate policies at the federal state and municipal levels," says Mr Steiner. "The challenge now for governments, energy planners and policy makers is to build off of this positive market development."
But Greenpeace was sceptical, pointing out that global energy investment was in the region of $1 trillion a year and that BP and Shell spent 5% or less of their money on supporting renewables and 95% on oil and gas schemes. "There are lots of encouraging signs here but $100bn a year is still peanuts and while we do believe renewables hold the key to tackling climate change we are slightly sceptical that we have reached some kind of tipping point," said Charlie Kronick, head of climate and energy campaign at Greenpeace.
There were also concerns about the 20% increase in investment in biofuels, mainly in the US, with Greenpeace pointing out that corn-based fuels of this kind could not be considered sustainable.
The UN accepts that there are "significant challenges" ahead, pointing to the way investment continues to be unevenly distributed and still almost absent from areas that desperately need it, such as sub-Saharan Africa. It is a recognition that the vast bulk of investment is driven by tax incentives and other schemes.
The wind sector attracted nearly 40% of the new money with solar on 16% and biofuels on 26% - a rise that can be largely attributed to US government interest in the sector.
The WilderHill New Energy Global Innovation Index, used by the UN to track publicly quoted renewables stocks, began 2006 at 220 points, ended the year at 288 and has since risen to 360 - up 64% in 16 months to April.